A Gallup random dial poll of 607 small businesses conducted November 12-16
2012 asked the question "Over the next 12 months, do you expect the overall
number of job positions at your company to increase a lot, increase a little,
stay the same, decrease a little, or decrease a lot?"

U.S. small-business owners expect to add fewer net new jobs over the next
12 months than at any time since the depths of the 2008-2009 recession, according
to this November's Wells Fargo/Gallup Small Business Index survey. Small-business
owners' net hiring intentions for the next 12 months plunged to -4 in November,
down from +10 in July and matching the previous record low recorded by the
Wells Fargo/Small Business Index of -4 in November 2008.

Historically, net hiring intentions have tended to be very positive, with
small-business owners expecting to grow and hire more new employees than
they will let go over the next 12 months. In good economic years, net hiring
intentions have been in the double-digits. This has not been the case since
the recession and financial crisis in 2008-2009 with net hiring intentions
reaching a low of -4 in November 2008. There was considerable improvement
in small-business owners' hiring expectations during much of 2012, prior
to the recent November plunge, but now expectations have deteriorated to
tie the low recorded in 2008.

In November, 21% of owners say they expect to decrease jobs at their companies
over the next 12 months, the most recorded on this measure since the inception
of the Wells Fargo/Gallup Small Business Index in August 2003. At the same
time, 17% of small-business owners say they expect to increase the number
of jobs or positions at their companies, down from 20% in July of this year
and the lowest level measured since November 2011.

Owners' Net Hiring Down Over Past 12 Months

In addition to asking about future hiring intentions, the survey also asks
small-business owners to report on hiring over the past 12 months. In November,
more small-business owners reported decreasing the number of employees (26%)
than increasing (14%), resulting in a net hiring score of -12. That is down
from -7 in July and -9 in the prior three quarterly measurements. Net hiring
over the past 12 months is about where it was in July 2011, at -11. This
lack of improvement in small-business owners' self-reported hiring helps
explain why too few new jobs have been created during much of 2012 to significantly
lower the U.S. unemployment rate.

Implications

That net hiring expectations at the nation's small businesses have declined
to levels last seen in late 2008 is reason for concern. Such low net hiring
expectations were followed by massive layoffs in early 2009. While a repeat
of that experience seems unlikely in 2013, there is the potential for a serious
decline in jobs early next year if small-business owners' hiring intentions
do not improve.

Whether the pessimism of the nation's small-business owners is due to the
fiscal cliff, Superstorm Sandy, the election, or some combination of these
factors, the U.S. economy remains weak and unemployment remains high from
a historical perspective. A further sharp increase in small-business layoffs,
resulting in higher unemployment on top of the current economic conditions,
could turn today's slow growing U.S. economy into something worse.

Not Sandy, Not Fiscal Cliff

It is difficult to blame this on the fiscal cliff, and even more difficult
to pin this on Sandy. More than likely, the poor net result is primarily the
result of a clear slowdown in the economy (lack of customers).